Dixons Retail sank deeper into the red in the first half of the year as the electricals giant was dragged down by chaos in the eurozone and a £4m bill to restock and repair the PC World and Currys stores looted during the summer riots in London.

The electricals giant said trading in Greece and Italy had been affected by the sovereign debt crisis which was eroding consumer confidence, contributing to a near £20m loss for its international division.

"The economic instability across southern Europe has inevitably led to a tough trading environment," said chief executive John Browett, although he insisted the situation was not yet as grave as in the wake of the Lehman Brothers collapse in 2008: "There's no panic among our customer base. People are a little more cautious."

Looters targeted PC World and Currys stores for flatscreen TVs and laptops during the summer unrest in the capital. The company said the £4m figure related to stolen stock as well as repair costs.

Another disappointment was the group's internet arm, which includes the Dixons and Pixmania websites, where underlying sales plunged 16% and losses widened to £7.4m. That took the group to an underlying loss of £25.3m for the 24 weeks to 15 October. That compared with a loss of £6.9m last year, but was better than many analysts expected.

In the UK, like-for-like sales fell 8%, but the retailer gained market share in a "challenging environment" that saw US consumer electronics group Best Buy announce it was pulling out of the UK earlier this month and Kesa pay a turnaround specialist to take the loss-making Comet chain off its hands. Argos has also warned of steep sales declines at its consumer electronics business in recent months.

Browett has been overhauling Currys and PC World by remodelling its stores and investing in staff training to improve customer service. The turnaround has started to pay off, with losses at the UK division narrowing to £3.9m on sales of £1.5bn during the period.

Browett said that despite the tough climate households were willing to make "sacrifices" to get their hands on the latest technology with strong demand for the Ipad 2, high-end food mixers and cappuccino-makers. "There's very little evidence of trading down," said Browett, although households were skimping by buying cheaper TVs for their bedrooms.

To get shoppers to start their Christmas shopping, Dixons kicked off a "100-hour online price crash" on Thursday that will run until midnight on Monday – dubbed Cyber Monday – which is expected to be the biggest online shopping day of the year. Discounts include £100 off an iPad and 30% off Beats by Dre Headphones, one of this year's must-have gifts.

The shares, which hit a three-year low of 9.245p on Wednesday, closed up 7% at 10.02p.